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Introduction
This paper reviews literature relating to knowledge workers and its application to Nokia Corporation. It proposes a model to understand the way KM affects the organization, especially human resource management (Hannabuss, 2001). KM is a term used to refer to the management of the skilled and knowledgeable employees in an organization (Caddy, 2007).
Skilled and knowledgeable employees are important because they help the organization to utilize its competitive advantage in innovation (Henard & McFadyen, 2008). They lead to increased sales revenue and improved financial performance in an organization.
Different levels in the organization enjoy managing knowledge employees, since employees understand what is important in the organization. HRM is usually at ease with managing these employees. However, it has the task of increasing knowledge in the organization through workshops, seminars, and training.
Additionally, human resource responsibilities change to include the creation of teamwork in the organization, to facilitate not only sharing and the increase of knowledge, but also for organizational performance (Winograd & Flores, 1986).
Nokia
Nokia Corporation is the world leader in provision innovative solutions through production of high quality products to enhance the process of knowledge creation and transfer within organizations and across different parts of the world. The company’s mission is as simple as “Connecting people.” This is what has driven the company towards its success.
In highly competitive industry like mobile phone services where all companies are striving towards securing a stable market share of customers, the company needs to come up with elaborate measures of knowledge management systems to increase the chances of survival in the industry.
Nokia Company has been in the forefront in ensuring that its products meet or even go beyond customer satisfaction through integration of its services carrying out of intensive research and development in order to come up with appropriate handsets which customer demands. The company aims at building great mobile products to enable billions of people all over the world enjoy life’s opportunities through mobile.
Knowledge Management
Galia and Legros (2003, p. 15) argues that a rival organization of sustainable worth builds on what it “collectively knows,” how good it uses what it knows and how directly it “acquires and uses knowledge that is new.” KM provides an enabling environment for an organization to obtain this advantage. It helps to transform established processes into entirely superior collective knowledge bases in an organization (Rasheed, n.d, p. 3).
According to Yahya and Goh (2002, p. 462), knowledge is the acquaintance of facts, truth, and principles from study. Over time, knowledge has become an important asset for organizations because most companies find it useful for their success. KM cannot avoid concerning itself, largely, with the management of people who work with or work on knowledge.
Consequently, demand has been necessary for a class of workers known as knowledge workers (Richard, 2004, p. 3). Corporations have been looking at knowledge as a resource. Martin (2000, p. 13) posits that the existence of such a perspective led to the emergence of KM. KM has subsisted in combination with the development of knowledge information systems and KM systems.
Additionally, there are new terminologies such as knowledge perspective of the firm (Gold, Malhotra & Segars, 2001). Different people have defined KM differently. Some have defined it as a form of document management, which is a system of letting engineers share design data or for consultants to share desirable practices (Luhmann, 1995).
According to Benson (2006, p. 186), KM may mean a simple, searchable database to customer service and call center managers. However, Barnes (2002, p. 36) defines KM as a set of practices that maximizes the business value of knowledge by assembly, structuring, and bringing it at critical points of customer interface.
KM systems have developed over time to offer effective possibilities of access by call center agents, web agents, customers, and partners, or their combination (Lueg, 2001). Thus, knowledge should be a multi-channel resource to an organization.
The basic goals of KM systems in organizations are to reduce costs of production in the organization, improve service provision, improve on the consistency of the services provided by the organization, and improve the overall performance of the organization, such as customer service and financial performance (Mohanta & Thooyamani, 2010).
Additionally, KM can apply in other strategic areas in an organization, such as outsourcing, merging of two or more call centers, and extension of call centers (Drucker, 1994).
Knowledge should be a multi-channel asset to the organization. KM systems typically deploy to achieve specific and measurable goals in the organization through several processes (Habermas, 1987).
KM processes include organizational learning, which is the routine by which a firm takes a report as knowledge, and knowledge production, which is the routine, and which transforms and integrates tender report into knowledge that in turn is utilitarian to change commercial operation problems.
In order to reduce harmful effects of KM to an organization, there is the need to overcome obstacles such as issues related to concepts and/or mindsets and operation in the organization (Yahya & Goh, 2002, p. 466).
Classification of knowledge
Various researchers have come up with various ways of classifying knowledge. Knowledge can be either tacit or explicit. Tacit knowledge is an internalized knowledge that one may not be consciously aware of for instance the one performs some tasks. Explicit knowledge is the knowledge that one holds consciously, that is in a form that can be easily communicated to other people (Alavi and Leidner, 2001).
There is an also content and relational perspective of knowledge and knowledge management. The content perspective asserts that knowledge can easily be stored since it can be codified while the relational perspective recognizes the relational aspects of knowledge (Esch, 2008).
Knowledge management efforts need to change internalized tacit knowledge into explicit to facilitate sharing of knowledge. There is a research, which suggests that a difference between tacit knowledge and explicit knowledge led to oversimplification. Nonaka and Takeuchi (1995) came up with a model that takes into account a circling knowledge process interaction between explicit and tacit knowledge.
The proposed model is SECI (Socialization, Externalization, Combination and Internalization). The model asserts that knowledge follows a cycle in which explicit knowledge can be converted into tacit knowledge and vice versa.
Another widely used model, which categorizes knowledge dimensions, distinguishes between embodied and embedded knowledge of a system. Embodied knowledge is a learned capability of a human body’s nervous system (Nonaka and Takeuchi, 1995).
Impact of Knowledge Management on Nokia
KM can be applied in Nokia Corporation in various sections. The impacts of applying it in the organization are evident. The performance of the company will improve since KM helps the organization to reduce the operating costs. Moreover, the human resource department will find it easy to supervise employees while on duty. Below is an explanation of these impacts.
Human Resource Management
Knowledge economy is a term that has risen in human resource management with a major shift in focus of the HRM from a bureaucratic ‘personnel management’ operation to the development of discrete functions of the HRM. The incorporation of these roles to support competitive benefit and a strategic thrust has accompanied the application of KM in HRM.
According to Robles-Flores (2004, p. 99), specialists are warning that HRM faces extinction unless it responds to changes that arise from the shift from a traditional to a knowledge-based economy.
Jackson, Farndale and Kakabadse (2003, p. 195) adds that if the human resource function is unable to add value under these conditions, it is under extreme threat. Gloet (2004, p. 75) argues that the HRM can reinvent itself through its input to effective linkages between the management of human capital and KM within organizations.
Galia and Legros (2003) note that there has been growing interest in the relationship between KM and HRM over recent years, as both KM and HRM have grown more refined and intricate. Though there are points of view that there is a reasonable agreement on the character and scope of HRM, its components and principles, this is not the case with knowledge management.
As Yahya and Goh (2002, p. 461) note, the vital aspect of any sensible understanding of knowledge and its incorporation into the management of organizations is awareness of a range of views on the KM concept.
This includes the perceptions of KM as an entity, a resource, a capacity, and a process (Lengnick-Hall and Lengnick-Hall, 2003, p. 99). However, knowledge applies as a social creation emerging at the interface between people and information, and especially within communities engaged in communication, creation, and sharing of knowledge and learning.
According to Lengnick-Hall and Lengnick-Hall (2003, p. 130), competitive advantage in organizations now rests on the successful application of knowledge. The proliferation of information and communication technologies has increased with the rise in knowledge based economic activities. This exists in combination with rapid economic change, complexity of global organizations, and rapid change.
In order to manage these changes, human resource management must also respond to changes by expanding the traditional roles of human resource management, and include both within and outside the organization. Coates (2001, p. 5) notes that the traditional focus on managing people has broadened to include managing organizational capabilities, managing relationships, and managing learning and knowledge in the organization.
Four areas in HRM have undergone changes in order to respond to the demands of the economy of knowledge and to develop connections with knowledge management. These areas are the strategic focus of HRM, roles, learning focus, and responsibilities (Storey & Barnett, 2000).
Financial Impacts
Knowledge management aims at reducing cost of production in an organization. It has helped Nokia lower the cost of customer service by reducing the number of repeat calls, call handling, agent training, and by maximizing the ability of employees to solve problems in the organization.
The improvement of employees’ ability to perform better does not only enhance the net efficiency of employees in the call center, but it also gives firms access to a larger labor pool, because there is a reduced need to find other employees with interpersonal skills and the domain knowledge. According to Jackson, Farndale and Kakabadse (2003, p. 190), KM usually helps companies provide better quality services.
The clients of the Nokia are more likely to receive the right answer in time with no need to be on hold or to move to another agent. The provision of quality services to customers usually leads to a better brand reputation for the company and a good company name. This translates to increased customers, increased market share, revenue, and hence the profit of the organization (Meehan, 1999).
Customers who buy a product with problems but receive “world-class” customer service while resolving the problem are more than twice as likely to repurchase from the company than customers who buy a perfect product with no problems at all (Lang, 2001).
Additionally, Gloet and Martin (n.d) compliment that consistency in the provision of quality services and goods in an organization requires the use of KM. It is difficult for the firm to accustom with the responses of customers without KM (Buckland, 1991).
The consistency applies in the customer care given to customers because one response applies for all customers with the same question. The achievement of consistency enables the organization to boost its quality service and product provision, hence boosting its financial performance (Fivaz, 2000).
According to Rumizen (2002, p. 106), many multinational corporations outsource their raw materials from other countries. Outsourcing is expensive since most outsourcing contracts are usually costly. However, KM can help an outsourcing firm to negotiate the deal of outsourcing, based on KM to reduce communication costs.
Jackson, Farndale, and Kakabadse (2003) note that KM could make the transition virtually painless, and significantly lower the cost of training employees. Merging call centers in an organization could also be costly to the organization. Using knowledge management, the costs of merging the call centers can reduce while the financial performance of the organization improves (Davis & Botkin, 1999).
Impacts on the Competitive Advantage
Effective competition in the industry requires use of certain strategies that include differentiation of products, innovation, research and development, and increased networking. In order to gain any competitive advantage, KM plays an important role. According to Galia and Legros (2003, p. 13), KM plays a big role in identifying the competitive advantage for Nokia.
In order to succeed in its industry, Nokia needs a strong competitive advantage against its competitors. Companies have different competitive advantages. The use of KM is essential in identifying the best competitive advantage for the firm.
According to Yeuk-Mui, Korczynski and Frenkel (2002, p. 8), KM can help the HRM department charged with recruitment to select an effective and knowledgeable team in the organization. The knowledgeable team can create a competitive advantage for the organization through innovation.
As pointed out by Martin (2000, p. 29), innovation is an important competitive advantage for all those organizations operating in competitive industries. Innovation enables the organization to produce new products that suit the market and the needs of consumers (Probst, Raub & Romhardt, 1999).
On differentiation, KM can help the recruitment of knowledgeable employees who will carry out a successful study of the market and enable the organization to differentiate its products successfully in the competitive industry (Binney, 2001).
Differentiation is important because, as a competitive advantage, it will help the company to make its products different from those of its competitors. Since the products will undergo manufacture by a highly qualified team of employees, the company brand will stand out from many other products as the best (Harkema & Browaeys, 2002).
According to Brown & Duguid (2000), teamwork is very important in ensuring better performance in an organization. The use of KM in selecting highly knowledgeable individuals ensures that employees work as a team. Through knowledge management, the work of human resource management to cater for employees’ needs eases (Yolles, 2000). Monitoring employees as they work in teams will be easy.
Additionally, there is easy handling of any problems encountered by employees in time. Therefore, there will be fewer disruptions in production, hence improved product quality. Additionally, the recruitment of a highly skilled labor force ensures that the best knowledge applies in production in different sections of an organization (Barth, 2000). The result is a high quality product or service blended together with the best skills.
Therefore, proper management of teamwork by the human resource aided by KM can create a competitive advantage for the organization, leading to better performance (Berger & Luckmann, 1966). Knowledge workers work in teams, and if knowledge workers are not employees, they must at least feature affiliation with an organization (Drucker, 1994, p. 71).
Jackson, Farndale and Kakabadse, (2003, p. 461) argue that KM ensures that there is effective communication within an organization and the outside environment. Using KM systems, the management of the organization is able to execute its duties, linking all participants in the supply chain of the organization such as the suppliers, the creditors, distributors, and the customers.
Robles-Flores (2004) posits that the effectiveness of an integrated supply chain depends on the implementation of KM in the organization. Therefore, the use of KM in an organization can improve the integrated supply chain of an organization (Lindgren & Henfridsson, 2002).
This cuts down the costs along the supply chain, reducing further the product costs, and enhancing performance. The integrated supply chain can form a good competitive advantage for an organization, given the use of KM (Clarke & Rollo, 2001).
Conclusion
The modern economy is full of knowledge, with organizations employing skilled employees. The employment of skilled workers is important because it helps the organization to identify and develop competitive advantage. KM in an organization is an important concept that affects the functions of HRM.
Human resource management shifts its traditional employee management to include other functions associated with the development of the organization. The effect of employing skilled employees is improved financial performance, growth, and development. On the external environment, KM leads to better products of the organization, hence improved reputation of the company and the good reputation of the product brand.
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